DEPARTMENT OF ECONOMICS

Working Paper

UNIVERSITY OF MASSACHUSETTS AMHERST

UMass Amherst Economics Papers

No Employment without Participation: An Evaluation of India's Employment

Program in Eastern Uttar Pradesh

Kartik Misra

Working Paper 2019-13

No Employment without Participation: An Evaluation of India's Employment Program in Eastern Uttar Pradesh

Kartik Misra1

Abstract

The Mahatma Gandhi National Rural Employment Guarantee Act (NREGA) provides 100 days of employment in a year to every rural household at the legal minimum wage. At the national level this programme has been highly successful in providing an income safety-net to small peasants and landless workers. However, in the poorer states of Uttar Pradesh, Bihar and Jharkhand the provision of public employment under NREGA has been inadequate. Using evidence from field research in the Mirzapur district of Uttar Pradesh, this paper aims to study how awareness among programme beneficiaries about their legal entitlements and at various levels of government determines the provision of NREGA employment in one of the poorest regions of the country. Further, we discuss the impact of NREGA on agricultural productivity and wage bargaining by landless workers who are the intended beneficiaries of NREGA. Our findings suggest that patron-client exchanges between the local elite and NREGA beneficiaries determines the provision of public employment and generates rents for the local elite. Therefore, there is urgent need for increasing transparency in NREGA provision and creating mechanisms to hold elected representatives and government functionaries accountable to NREGA beneficiaries.

1 Department of Economics, University of Massachusetts, Amherst, MA 01002. kmisra@econs.umass.edu I thank Deepankar Basu, Lynnette Leidy Sievert and Uttara Balakrishnan for their comments and suggestions. I thank Amit Kumar Singh the Chief Development Officer of Mirzapur, Vivek Kumar, Sandeep Srivastava and Manoj Sharma for logistical support. Finally, I thank Manish Tiwari, Awadhraj Singh, Anurag Srivastava, Shailendra Maurya, Shatrughan Dubey and Vinay Dubey for help with data collection. This research was funded by a research fellowship from the American Institute of India Studies and the Department of Economics, University of Massachusetts Amherst.

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1. INTRODUCTION

The Mahatma Gandhi National Rural Employment Guarantee Act (NREGA) is the largest rural

welfare program in the world. Enacted in India in 2005, this scheme guarantees 100 days of

employment in a year to every rural household at the legal minimum wage. The Act was

operational in the 200 poorest districts by February 2006, another 130 districts got the scheme in

the second phase in April 2007 and finally by 2008, the entire country was under its ambit. This

legal work entitlement impacts close to 50 million households in India and is thus a powerful tool

for social and economic transformation. Through its joint emphasis on social protection and

livelihood security, the scheme endeavours to empower the rural poor by instilling a new sense of

identity and bargaining power and make economic growth inclusive for all in rural India. However,

lack of transparency in its implementation and awareness of legal entitlements of workers has

diluted the demand-driven nature of the program. Using primary data collected from the Halia

block of Mirzapur district in Uttar Pradesh, this paper documents the extent of awareness of legal

entitlements by program beneficiaries and government officials responsible for its implementation

in one of the poorest regions of the country. Further, we discuss the impact of NREGA on

agricultural productivity and wage bargaining by landless workers who are the intended

beneficiaries of NREGA. Our study suggests that patron-client exchanges between the local elite

and NREGA beneficiaries determines the provision of public employment and generates rents for

the local elite.

Public workfare programs have enjoyed a long and distinguished presence in the experience of

economic development around the world and their potential benefits depend on their ability to

create income safety-nets for the poor.2 This program improves upon earlier employment schemes

in two ways. First, it employs workers directly and prohibits the hiring of private contractors as

there is a long history of private contractors exploiting workers through underpayment and other

forms of harassment (Ambasta et al., 2008). Second, public works under NREGA do not use labour

displacing technology in order to maximize employment generation under NREGA. NREGA is a

demand driven program based on the principle of self-selection (Dutta et al., 2012). It treats

employment as a legal right and if the state is unable to provide employment for participants then

2 India has a long history with these programs since the 1960s. Schemes like Jawahar Rozgar Yojana, Employment Assurance Scheme, Food for Work Program, Jawahar Gram Samridhi Yojana, and Sampoorna Grameen Rozgar Yojana were forerunners to NREGA. Subbarao (1997) provides an overview of India’s employment guarantee programs.

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it is obliged to pay workers without work. Public employment generated through NREGA is meant

to generate productive assets that increase agricultural productivity and provide livelihood

security. These include works aimed at natural resource management like irrigation works and

afforestation. Moreover, public works can also be aimed to specifically improve the productivity

of agricultural land owned by the scheduled castes, scheduled tribes and other disadvantaged

sections of society. Finally, labour can also be employed to build rural infrastructure like toilets,

roads and food grain storage structures (Dreze et al., 2006).

In 2018, NREGA completed a decade of being in operation throughout the country. Several

academic studies and newspaper editorials were written to analyse each aspect of this historic

legislation. Evidence suggests that public works leading to capital formation in agriculture have

three potential effects on welfare (i) The direct effect of job creation for those employed (Klonner

and Oldiges, 2014), (ii) public employment in the lean season of agriculture raise wages (Azam,

2011); and (iii) creation of public goods which increase agricultural productivity (Berg et al.,

2012). There is evidence that NREGA has increased agricultural wages by around 4.3 percent

(Berg et al., 2018) which caused a 20-percentage point shift away from use of labour-intensive

technologies by small farmers (Bhargava, 2014) and resulted in crowing-out of private agricultural

labour by 5 percentage points in regions where NREGA employment is not rationed (Misra, 2019).

Additionally, Imbert and Papp (2015) show that the increase in wages for households in the poorest

30 percent of the population accounts for around 31 percent of the total welfare gains from the

program. Correspondingly, others have argued that public works under NREGA contributed to

increasing the productivity of agriculture which contributed to the non-transfer benefits of the

programme (Deininger and Liu, 2013; Abreu et al., 2014).

In practice, NREGA suffers from several problems like reduced budgetary allocation, corruption,

violation of people's entitlements and insufficient employment generation (Aggarwal, 2016).

Further, the implementation and performance of NREGA varies considerably across states and

districts. While states like Andhra Pradesh, Chhattisgarh, Himachal Pradesh, Madhya Pradesh,

Rajasthan and Tamil Nadu have successfully created more than 100 days of employment under

the program (Imbert and Papp, 2015), other states like Jharkhand and Bihar have lagged in the

provision of NREGA employment under the program (Dutta et al., 2012; Bhatia and Dreze, 2006).

Existing studies have identified limited administrative capacities, low awareness of the program

among beneficiaries (Ravallion et al., 2015), insufficient financial allocation for NREGA

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(Banerjee and Saha, 2010), and corruption by bureaucrats (Adhikari and Bhatia, 2010) and private

contractors (Bhagat, 2012) to explain poor performance of the program in certain states. Misra

(2019) finds that local political economy factors like historical inequality in landownership and

concentration of political power determines the provision of NREGA employment and its labour

market impact.

In the state of Uttar Pradesh (UP), existing literature documents that the provision of NREGA has

been inadequate. Dutta et al., (2012) show that in 2009-10 over 54 percent of the households in

UP that demanded work under NREGA were not provided public employment guaranteed under

the Act. Paradoxically, the same study found that the demand for NREGA work in UP is also low.

Only around 35 percent of rural households officially demanded employment under NREGA when

the national average was around 45 percent. This is surprising since UP has the highest proportion

of the population below the poverty line in comparison to any state in the country. This lack of

demand for NREGA suggests that workers may not be fully aware of their rights to demand public

employment which is NREGA's unique feature.

National level studies on the functioning of NREGA conceals considerable regional heterogeneity

in the implementation of the programme and few field-based studies have focussed on local

political economy factors in the provision of NREGA, particularly in eastern Uttar Pradesh. This

research aims to fill this lacuna in the existing literature. This paper aims to study how awareness

among beneficiaries about their legal entitlements and at various levels of government determine

the functioning of NREGA in one of the poorest regions of the country where NREGA has been

operational since its inception in 2006. High incidence of poverty, prevalence of bonded labour in

agriculture and high Maoist insurgency, were the main motivations in choosing the Halia block of

Mirzapur district in Uttar Pradesh (UP) as the main setting for this study. We conducted in-depth

household level surveys with NREGA beneficiaries and semi-structured interviews with

government officials in 12 Gram Panchayats of Halia block.

This study contributes to the existing literature on the functioning of NREGA in three critical ways.

First, this paper is the first to interview government officials at the state, district and block-level

responsible for the planning and implementation of the scheme to understand the bottlenecks in

NREGA implementation on the supply side. Using semi-structured interviews from government

functionaries, this paper discusses how and why the actual execution of NREGA diverges

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significantly from the provisions of the Act. This allows us to understand various processes

associated with the program based on information on the flow of finances, data entry processes

and the role of block and district level development officers in supporting the endeavours of the

Gram Panchayats.

Second, using primary household level data, we analyse bottlenecks on the demand side by

recording people's perceptions about NREGA implementation and the role of various stakeholders

to assess their awareness of various provisions of the Act. Finally, this paper analyses the impact

of NREGA on agricultural production, and labour supply of NREGA beneficiaries in the region to

ascertain whether NREGA income allows farmers to change their production decisions.

There are four major findings from this study. On the supply side, first, our findings suggest that

even though NREGA has been India’s flagship poverty alleviation program for more than a

decade, government functionaries at the state and local level have little awareness of their

responsibilities and administrative capacity to ensure smooth functioning of NREGA at the grass-

roots level. Additionally, official records of the number of employment days created, wages paid

under the programme differ significantly from those reported by workers. Second, in the surveyed

villages all decision-making authority was concentrated with the elected head of the village

assembly (Pradhan). This concentration of power creates patron-client relationships of exchange

between the Pradhan and workers which generates rents for the former and safeguards his class

interests.

On the demand side, we find that first, around 60 percent of NREGA workers in our sample were

not aware of the provisions of the scheme and their role in demanding employment under NREGA

and participating in its implementation and planning at the local level. Further, contrary to

evidence from states like Rajasthan and Andhra Pradesh where workers’ participation and social

audits create transparency and predictability in NREGA implementation, our surveys find that

citizens are excluded from the planning process and the role of the village assembly is totally

irrelevant in the provision of NREGA. Second, the provision of NREGA in this region is not

enough to increase agricultural productivity and consequently, its impact on agricultural wage

bargaining is limited. This is contrary to national level analysis which finds that NREGA has a

positive impact on agricultural productivity and wages (Berg et al., 2012; Berg et al., 2018). This

difference is caused primarily by the erratic and unpredictable nature of NREGA employment in

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Mirzapur has not resulted in productive assets being created in the region and consequently,

NREGA has had no impact on agricultural productivity in this region.

The rest of this paper is organised as follows. Section 2 presents an overview of the survey region

and discusses the sampling process and methodology of data collection used in this study. Section

3 presents the findings of our interviews with government officials and shows how processes

necessary to increase workers' participation in NREGA functioning are not followed. Section 4

analyses the findings of our household surveys of NREGA beneficiaries and section 5 reports the

findings from our focus-group discussions on how NREGA is impacting agricultural productivity

and labour demand. Section 6 argues that lack of awareness among NREGA beneficiaries serves

the vital purpose of protecting the interests of the local elite and finally section 7 concludes with

some policy implications of this study.

2. CHOICE OF DISTRICT AND DATA COLLECTION

This study was conducted in the Halia block of Mirzapur district in eastern Uttar Pradesh.3 Lack

of proper implementation and embezzlement of NREGA funds in the region has attracted

considerable media attention and has been the subject of a high-level official inquiry (PTI, 2014).4

In this context, there are two main motivations for documenting the functioning of NREGA in this

region.

First, this region is characterized by the presence of the kol community which is one of the most-

backward communities of the country and is forced to work in tied-labour arrangements in

agriculture. Following the pioneering work of Srinivas and Marriot (1995), several researchers

have analysed the role of caste identity in determining people's access to public goods, their ability

to engage profitably in trade and to raise capital through collateral (Banerjee and Somanathan,

2007; Anderson, 2011; Verma, 1991; Dreze et al., 1999). Rural wages and the incidence of poverty

differ along gender, caste and religious lines. Social stratification along caste and gender lines can

reduce certain groups' access to NREGA, who remain impoverished in regions where these

inequalities are more pronounced. In this context, analysing the kol community become crucial

given their extreme social and economic exclusion. The second motivation for choosing Halia

3 Blocks or tehsils are administrative sub-division of a district created for rural development. Halia is one of the 12 administrative blocks of Mirzapur. 4 For instance, Singh (2009) records instances of corruption and other problems with NREGA implementation in the region.

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block was that this region is affected by Maoist movements. While there is some literature which

examines the impact of NREGA on the Maoists, granular, block level evidence is scarce.

We conduced informal discussions with several state and district level officials and undertook

household level surveys of NREGA participants between November 2016 and March 2017. This

section presents an overview of the survey district and presents our sampling and data collection

strategy.

2.1 Mirzapur

Mirzapur located in the eastern part of Uttar Pradesh (UP), is one of the poorest 200 districts of

the country and among the fifteen poorest districts of UP (Haq, 2017).5 This district was covered

under NREGA in the first phase in 2006. It is a predominantly rural district with 86 percent of its

total population of around 2.5 million residing in rural areas. Over 65 percent of the total labour

force is employed in agriculture.6

Selected demographic indicators are given below in Table 1. The proportion of marginalized

communities, particularly Scheduled Castes is 28 percent in Mirzapur while the state-level average

is 23 percent. Socially backward communities like SCs and STs are over-represented in NREGA

participation as the incidence of poverty is higher for these groups.7 Correspondingly we find that

5 percent of our sample of NREGA beneficiaries comprises of STs, when their share in district-

level population is only 0.7 percent. Further, literacy rates among these groups (56 percent for SCs

and 57 percent for STs) are also lower than the state average of (60 percent for SCs and 64 percent

for STs). We next discuss the kol community and the Maoist movements in this region.

[INSERT TABLE 1 HERE]

2.1.1 Kols

In addition to widespread poverty and higher incidence of marginalized communities, Halia district

is also home to the kol community. The kols are a tribal community of Central India who live

primarily in the states of Uttar Pradesh, Bihar, Jharkhand, Madhya Pradesh, Maharashtra and

Tripura. This community is classified as Scheduled Tribes (ST) in all states except UP where they

5 In the 2003 ranking of districts by poverty, Mirzapur was ranked 180 out of the 447 backward districts of the country (Planning Commission, 2005). 6 This includes the percentage of cultivators and agricultural wage workers. 7 For instance, in 2011, 45 percent of the Scheduled Tribes living in rural India were below the poverty line in comparison to only 15 percent of those belonging to the upper castes.

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are classified as Scheduled Castes (SC). According to the Census of India, (2011) the total

population of the community is estimated at 1.7 million, of which around 300 thousand kols live

in eastern UP.8

The kols like most tribal adivasi groups of the country, have traditionally depended on forest

produce for subsistence. The kols of Central India have been among the most disadvantaged groups

in the country and their development indicators have lagged other tribal communities. For instance,

in a study of body-mass index (BMI) of adult males in Central India, Adak et al., (2006) find that

over 51 percent of the kols in the region suffered from severe to mild chronic energy deficiency.

In the three decades following India's independence in 1947, these groups have been dispossessed

of their lands and denied access to forests under various developmental paradigms. These groups

have been displaced and rendered homeless for the construction of large dams and industrial

townships (Guha, 2007). This process of dispossession of adivasis accelerated under the neoliberal

policies followed by the Indian state since the 1990s. Verma (2016) shows that till 1990s, 40

percent of all displaced social groups were adivasis and policies of involuntary land transfer for

setting-up of Special Economic Zones (SEZs) increased the dispossession of this group

significantly. Further, this group has suffered violent atrocities and human rights violations by the

police and other agencies as they organize resistance movements against land grab attempts by the

state (Baviskar, 2003).

The kols of southern UP work primarily as wage workers in agriculture and in quarry mining

industries. Most kol households either do not own agricultural land or own uneven, rocky or less-

productive land.9 They dwell in stone or katchcha houses without basic amenities like electricity,

clean water, toilets or access to health care (Rashid, 2013). Srinivasan et al., (2005) find that the

kols of Halia block in Mirzapur are among the few communities where bonded labour in

agriculture has continued unabated. These tied-labour arrangements among kols represent inter-

linked factor markets characterized by debt-bondage where workers are forced to work for large

agricultural landlords (often over generations) in order to service a short debt or loan taken from

their employers.

8 Madhya Pradesh has around 900 thousand kol population which is the highest in the country. 9 A full account of struggles for kol landownership can be found here.

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In a detailed study of bonded workers in Halia block of Mirzapur, Shankar (1996) finds that

workers traditionally take a small loan in order to meet the expenses of a marriage or funeral

(shradh) and are forced to pledge their labour to the landlord who does not charge interest on the

loan. Further, workers are paid using food-grains.10 In addition, this labour-tying arrangement also

involves a component of share cropping. The kol workers are given a small plot of land (0.06 ha)

for subsistence farming and the landlords claims a share of the produce based on the credit and

inputs like seeds and fertilizers supplied by them in the production process.

2.1.2 Maoist movements in the region

In addition to bonded labour, the Halia block of Mirzapur is also affected by armed left-wing

Maoist movements by virtue of being situated at the border of Madhya Pradesh and Uttar Pradesh.

Socio-economic exclusion and high incidence of poverty has contributed to these struggles in the

region. Borooah (2008) finds that the probability of a district being affected by extremist

movements is increasing in poverty and decreasing in literacy.

While 41 percent of UP's population is below the poverty-line, Mirzapur has a higher concentration

of poverty. Using the 2004, National Sample Survey (Consumption Expenditure Survey) we find

that the poverty rate in Mirzapur is around 53 percent. High levels of poverty coupled with Maoist

insurgencies has contributed to the listing of the district among 170 extremely backward districts

and among the 55 extremist affected districts of the country (Planning Commission, 2005).11 While

there is some evidence of NREGA has succeeded in creating an income safety-net for people and

improved their participation in anti-Maoist operations (Khanna and Zimmerman, 2017), therefore,

it is important to assess the impact of the programme in this region as such local level evidence is

scarce.

2.2 Sampling and Data Collection

This paper presents the findings of a field study conducted in the Halia block of Mirzapur district.

There are two components of the study. First, we document the district and block-level

administrative processes involved in the provision of NREGA and second, we discuss the gaps in

10 The wages in kind are mostly given in kodo which is an inferior rain-fed crop (Shankar, 1996). 11 See Kumar et al., (2015) for details of the Maoist movement in eastern Uttar Pradesh.

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implementation and the extent of awareness workers have of the rights of workers under the

program. Correspondingly, we collect data from government officials and NREGA beneficiaries.

2.2.1 Administrative Data Collection

This paper is the first to document the experiences of officials involved in the ground level

implementation of NREGA. Between August - November of 2017, we conducted several rounds

of semi-structured interviews with officials involved in NREGA implementation at the state,

district and block levels. At the state level, we discussed the role of the state government in the

implementation of NREGA with officials of the Ministry of Rural Development in the state capital

of Lucknow. At the district level, we interviewed the office of the Chief Development officer

(CDO) of Mirzapur to document the procedure of data entry, funds transfer and recording un-met

demand for NREGA work at the district level. Finally, at the block level we interviewed the office

of the Block Development Officer (BDO) to assess the administrative capacity at the block level

for NREGA provision and supervision in the Halia block of Mirzapur.

2.2.2 Household Survey Data

In order to understand the impediments to NREGA participation and timely wage payment in one

of the most backward regions of the country we conduced household level surveys of NREGA

beneficiaries in 12 Gram Panchayats of Halia block from November 2017 - February 2018. The

NREGA web portal provides detailed information about NREGA workers at the village level

including the number of days and names of projects in which NREGA beneficiaries have worked.

Using the work records for the year 2017 from the NREGA web-portal, we randomly selected

around 1100 households for our study. Of these, we were able to trace around 973 households who

were surveyed for this study.12

Our surveys included both quantitative and qualitative questions about household characteristics

and assets, indebtedness profiles of household members and their sources of income including

agricultural and non-agricultural earnings. Further, we asked beneficiaries about their participation

in and awareness of the provisions of NREGA. These included detailed questions about the number

12 Most villages had a population less than 2,000 people and settlements were organized along caste lines. Therefore, it was easy to identify and survey individuals from these households. In many cases we were informed that some individuals on our list had migrated out of the village a few years ago or were deceased. The inability of our team to locate around 120 households may indicate the presence of fudging of muster-rolls documented in existing studies like Adhikari and Bhatia (2010). However, we are unable to ascertain whether these were indeed instances of `ghost-workers' and suggest the need for future research on this issue.

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of days they worked under NREGA, wages paid and conditions of work. Additionally, we recorded

people's perceptions and experiences of negotiating with the Pradhans or BDO for their

entitlements under NREGA. Table 2 provides the break-up of sample households by their caste

and Gram Panchayat (GP). Fuliyari and Gaurava are the largest GPs in the sample and they

collectively contribute to around 40 percent of the sample. While, all GPs in the sample are affected

by Maoist activity, the villages of Fuliyari, Parshiakala, Deohyat, Khutha and Gaurava are right

at the border of Madhya Pradesh are more prone to insurgent activities. These household level

surveys were conducted in respondents’ homes, so they feel comfortable in answering questions

about NREGA wages received and their perceptions about the role of their elected representatives

and government officials.

[INSERT TABLE 2 HERE]

2.2.3 Focus Group Discussions

In addition, we also conducted two focus group discussions asking people about the impact of

NREGA on agricultural productivity, incomes and employment opportunities. These focus group

discussions were held in the villages of Halia and Fuliyari where around 10-15 cultivators and

agricultural wage workers were asked to discuss whether NREGA was having any spill over

impact in agriculture. In several villages we were invited by the Pradhan for a meeting to discuss

the functioning of NREGA and the problems faced by them. However, this would have interfered

with our findings, so we decided to not meet with the Pradhan’s.13

2.2.4 Summary Statistics

We present summary statistics for our sample in Table 3. We see most NREGA beneficiaries were

below the poverty line and lived in katchcha houses without access to clean drinking water and

toilets. The respondents of all social groups relied primarily on public distribution of food at

subsidized rates for rations. Most households had solar energy panels installed on their roofs which

generally powered one LCD lamp and a mobile charging plug point for around ten hours in a day.

These solar panels were installed under government programs where beneficiaries had to pay only

10 percent of the total cost. Further, most households had few durable assets other than bicycle

13 In some cases, the Pradhan’s offered to arrange for surveys to be conducted in his house but we rejected these offers.

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and mobile phones. In most cases, the mobile phones were used primarily by men and women did

not report owning mobiles.

[INSERT TABLE 3 HERE]

3. SUPPLY-SIDE CONSTRAINTS IN NREGA IMPLEMENTATION

As the survey of existing studies in Section 1 showed, there was surprisingly little awareness about

NREGA’s provisions and worker entitlements among our respondents. Existing research on the

implementation of NREGA has focused primarily on improving the transparency of the village

assemblies (Gram Panchayats) through social audits (Kumar and Shah, 2015) and capacity

building and greater monitoring (Aiyar and Samji, 2006). Other studies have discussed the role of

caste and gender affiliations of elected representatives (Johnson, 2009) and funds utilization and

state-level capacity for proper implementation of NREGA (Chakraborty, 2007). However, few

studies have focused on the bureaucratic capacity and opaque information flow within the

administrative set-up created to oversee the provision of NREGA, particularly in the poorer

states.14

The implementation of NREGA rests on the coordinated and timely functioning of the state,

district and local governments. Himanshu (2013) outlines the responsibilities of each of these

institutions in the planning, provision of public employment and wage payments under the

program. This scheme is largely financed by the Central government but under Section 32 of the

NREGA Act, the responsibility of implementing it is vested with state and local government or

the Gram Panchayats (Mookherjee, 2014). In this section, we discuss that lack of awareness of

workers' rights and the duties of elected representatives and government functionaries under

NREGA contributes to the formation of client-patron exchanges between workers and the local

elite and corruption in the provision of NREGA. We discuss the role played by each level of

government in Mirzapur district of eastern Uttar Pradesh.

3.1 Role of the State Government

At the state-level the major constraint faced in the state NREGA secretariat is the lack of adequate

number of officials to implement the various administrative duties. Most employees are contractual

14 Notable exceptions include Raabe et al., (2010) who conduct an analysis of NREGA implementation using case studies in Bihar and Aiyar and Samji (2009) who study the role the state government of Andhra Pradesh in the implementation of NREGA.

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data-entry staff with high turnaround rates. The administration was also unaware of its role in

appointing district level officials like the Employment Guarantee Assistant (Gram Rozgar

Sahayak) and the Program Officer (PO). We were told that these officials were determined at the

district level and the state authority does not interfere with local decisions.

State level NREGA operations in UP do not have any programs to increase awareness of NREGA

provisions among beneficiaries. Not only is this in violation of the responsibilities of the state

government, but also contributes to the lack of information about participant rights and

entitlements that we found in our field study. Further, under the NREGA Act state governments

are expected to engage professional agencies for technical support to improve the quality of data

collected under the program. This aspect of the scheme is also neglected. This disjoint between

the ‘perceived’ and ‘practiced’ responsibility of the state government was also witnessed in the

case of social audits. NREGA Act requires state governments to establish competent agencies to

conduct social audits of NREGA functioning and asset creation. However, state-level officials

contested this claim and stated that financial audits are conducted by the Central government and

local bodies like the Panchayats decide to inspect public works completed under NREGA.

Finally, officials were reluctant to answer any questions. Most officials maintained that there was

no delay in releasing funds from the State Employment Fund (SEF) to districts or the submission

of district-wise utilization certificates to the Central government. In fact, any instance of

insufficient or delayed fund transfer was blamed on delays in data entry. While there was general

acknowledgement of the fact that funds were inadequate to pay workers on time, officials were

not willing to explain these deficiencies.15 Therefore, the state level administrative set-up in UP

does not adequately fulfil its obligations under the NREGA Act, reflecting poor implementation

of the program at the state level. We next turn to district level implementation.

3.2 Role of the District Level Officials

The Chief Development Officer (CDO) is the main district level officer responsible for smooth

functioning of NREGA. Through our meetings with the CDO and his staff, we found the CDO

conducted bi-weekly meetings with all BDOs to tackle the bottlenecks associated with NREGA.

Further, the CDO had a team of around five contractual staff dedicated to data entry and

15 Public officials may be wary of pointing to the role of the state government in delaying or mismanagement of NREGA finances. However, our study could not ascertain these issues in detail.

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maintaining records. However, on inspecting the records, we found that the lists of projects and

information about works completed were not updated for the past six months. Further, according

to the records maintained by the CDO, all workers under NREGA were paid full wages on time.

However, when we cross-checked these entries with the workers, we found that official records

about the number of days worked and wages paid differed considerably from those reported by the

workers. The data entry staff at the CDO's office showed us that his records match those supplied

by the block level officials but there was no provision for workers to verify their records. In

addition, contrary to the provisions of the Act the CDO does not inspect or monitor the public

works completed under NREGA which is under the purview of the Block Development Officer

(BDO). We next turn to block level implementation.

3.3 Role of the Block Level Officials

Successful implementation of NREGA depends critically on block level officers discharging their

duties in a transparent manner. However, it was at this level that we found that procedures were

most opaque and diverged from the rules considerably. For instance, there was no Program Officer

(PO) to oversee the implementation of NREGA. The PO is the main authority who accepts

applications for NREGA work, scrutinizes proposals and creates NREGA employment. In the

absence of the PO, NREGA provision and transparency mechanisms within the Act are diluted.

For instance, there are no direct employment requests made to block level officials and monitoring

of NREGA works is seldom undertaken. When asked about social audits, we were told that there

was never a request for these audits from the Gram Panchayats. Further, NREGA muster rolls were

created by contractual data entry staff and suffered from delays due to electricity shortage and

computer malfunctions.

The BDO himself primarily works out of another district and seldom visits the block. Therefore,

information about NREGA responsibilities was limited in the Halia block administration office.

We were told that the office simply compiles the lists of number of workdays generated under

NREGA based on the information provided by the Pradhan. However, the officials at the BDO's

office denied any corruption and leakages in NREGA funds transfer claiming that all payments

were directly made by the state-government into the bank or post-office accounts of NREGA

workers.

14

Further, we were told citizens have never approached the BDO for any NREGA related issue.

Correspondingly, the officials at the BDO's office believed that NREGA was working well in their

block in comparison to the neighbouring block. Given the lack of demands for accountability, it is

not surprising that the provision of NREGA in the block is well below the national average and

suffers from wage delays and other shortcomings. We next discuss implementation of NREGA at

the Gram Panchayat level.

4. STAGE-WISE FUNCTIONING OF NREGA

This section breaks down NREGA participation into different stages to discuss potential

challenges to its successful implementation. We discuss five main stages: (1) application for public

employment under NREGA, (2) provision of public employment and wage payment, (3)

supporting facilities at work sites, (4) asset creation under NREGA, and (5) presence of an efficient

grievance redressal mechanism.

4.1 Applying for NREGA works

In order to ensure that the demand driven nature of the program is maintained, the application for

NREGA employment involves two steps. First, households who anticipate working under NREGA

must register with the Gram Panchayat (GP) which issues a job card to all applicants with a five-

year validity (Dreze, Dey, and Khera, 2006). Second, any household with a valid job-card can

request NREGA employment by submitting an oral or written application to either the Gram

Panchayat or the NREGA program officer. We discuss these two steps in detail below.

Step 1: Job Cards

Our survey revealed that close to 90 percent of the respondents had NREGA job cards issued by

the GP. Most respondents (close to 95 percent) claimed that the Pradhan helped them in getting a

job-card. Panel A of Table 4 shows that there is little inter-caste variation in the proportion of

households with a valid job card. However, this percentage is significantly lower for Muslim

households (76 percent).

While most households had a valid job card, none of the job cards had any entry of the work done

in the last six-months. In addition, in four villages (around 30 percent) of the sample, the job cards

for the entire village were kept with the Pradhan’s and not the individual households. When we

15

asked the respondents to show us the job-cards, in most cases they could retrieve them from the

Pradhan's house. In these cases, the respondents stated that job cards were always kept with the

Pradhan and they had never questioned this practice.

Step 2: Requesting NREGA Employment

Around 70 percent households in our sample had never placed a formal request (oral or written)

for NREGA employment either to the BDO or the Pradhan. Some people had informally asked

the Pradhan for NREGA work but received no acknowledgement for this request. Most

respondents were unaware of their role in demanding employment under NREGA. It was believed

that NREGA works would begin only when the Pradhan desires. In fact, over 50 percent of the

respondents believed that NREGA works are undertaken in the village because the Pradhan

wanted to help them during the lean season of agriculture. This demonstrates that in practice, the

promise of demand driven employment guarantee is diluted as workers are unaware of the legal

provisions of the Act. This also explains why official records of NREGA works in the region do

not show any unfulfilled work demand during any time.16 Since people do not request the provision

of public employment, there is no mechanism to record how much work people want under

NREGA. Existing research suggests there is a wide gap between the demand and actual provision

of NREGA in regions where NREGA is not functioning properly (Dutta et al., (2014); Misra

(2019)). However, our findings suggest that this gap may be even higher as there is no procedure

to record the actual demand for NREGA employment by the beneficiaries. When we asked our

respondents how many days in a year would they like to work under NREGA, the majority

answered that they would like to work under NREGA for as much as possible. Surprisingly, 60

percent of the respondents were unaware of their legal entitlement of 100 days of NREGA

employment per household.

16 According to the data processing staff at the office of the Central Development Officer (CDO) there is no unfulfilled demand for NREGA is the district. According to the NREGA website, there are a few cases of unfulfilled work demand from the previous years. We were told that this is a actually a data entry problem and does not signify any unmet work demand under NREGA.

16

4.2 Provision of NREGA employment and Wage Payment

4.2.1 Provision of NREGA employment

The next step after the issuance of job cards and putting in a request for public employment is the

provision of public employment. Results from our survey show that both, participation rates

(extensive margin) and number of days worked (intensive margin) are low in our sample.

Participation rate of marginalized communities

Female participation in NREGA at 18 percent in UP is among the worst in the country as the

national average in 2012 was around 47 percent (Mann and Pande, 2012). Our study shows that

only 12 percent of the women worked under NREGA. This is particularly alarming since 33

percent of public employment created under the scheme is reserved for women.17 Our findings are

consistent with existing studies which argue that women’s participation in NREGA depends on

factors like presence of alternative employment for men (Desai, 2018). Since, our survey region is

one of the most backward districts of the country, employment opportunities for men are few and

correspondingly, they predominantly work under NREGA in the lean season of agriculture.

However, further research is needed to identify household-level impediments to women’s

participation in NREGA.18

Number of days worked by marginalized communities

The actual provision of NREGA in the region does not correspond to demand. In 2016, workers

reported working under NREGA for an average of 29 days. The number of days worked were

roughly equal for men and women (29 and 28 respectively). Panel B of Table 4 shows that

marginalized communities (SCs, STs OBCs and kols) reported working for more than 31 days in

a year while upper castes and Muslims worked for around 25 days. Low participation by Muslims

may be attributed to high rates of inter-seasonal migration by household members (62 percent) in

comparison to other social groups (35 percent).

17 Several studies have found that NREGA has had a positive impact on female labour force participation nationally (Azam, 2011) and political engagement in local decision-making (Girard, 2014). Tsaneva and Balakrishnan (2018) find that in the first year of the program, women living in districts where NREGA was implemented were less likely to experience depression symptoms as the program provided them economic security and independence. 18 Several studies like Folbre (1986) discuss intra-household decision-making where the head of the household, dictates his preferences over economic choices of other family members.

17

However, higher participation by marginalized communities suggests that NREGA serves as an

income safety-net for the poorer sections of society. Several studies using national and field level

data have concluded that NREGA is mostly availed by the poor and participation by people from

the top consumption quintile is merely 10 percent which means that the scheme is ‘not poorly

targeted’ (Sabhiki, 2012).19 This is borne out by other studies as well. Using field data from Andhra

Pradesh, Karnataka, Rajasthan and Maharashtra collected in 2010, studies show that small and

marginal farmers mainly benefited from NREGA except in distress prone districts of Anantpur

and Yavatmal where larger farmers also participated and gained from NREGA (Kareemulla et al.,

2010).

Differential provision of employment by socio-economic status

While the actual provision of NREGA was low in our sample, surprisingly, we found no evidence

of any discrimination in people's participation based on gender, religion or caste of the household.

In addition, none of the respondents reported having paid any bribes to help secure NREGA work

or wages. In 76 percent household’s public employment was primarily performed by men while in

others, both men and women participated in NREGA.

Mismatch between actual provision and reported provision

The number of workdays reported by respondents differed significantly from the official records

on the NREGA website. For instance, the average number of workdays according to the records

was only 25. Our findings suggest that there is significant discrepancy in official records of

NREGA employment. Panel B of Table 4 shows considerable inter-caste variation in the

difference between the official record and the actual number of days that people claimed to have

worked. For instance, the Scheduled Castes and OBC households reported having worked for an

average of 28 and 32 days respectively. However, according to the official records they worked

only for 21 and 24 days respectively. This implies that workdays were under-reported for

marginalized groups. This means that some of the labour performed by these groups was not

recorded in official statistics and correspondingly they were not paid for this labour. The trend was

different for upper caste households who reported having worked for 25 days but official records

indicate that they worked for 37 days. Therefore, there was significant over-reporting of workdays

19 This is important as concerns are raised about leakage to the non-poor (Bhagwati and Panagariya, 2014).

18

in this case. This implies that upper caste workers got paid more than what they worked while

poorer lower caste workers who depend more on income support provided by NREGA. This shows

that even though workers in the region do not face any discrimination in work allocation, but caste

plays a role in determining the earnings of NREGA workers. In contrast, evidence from Rajasthan

shows that when the provision of NREGA falls short of its demand, employment is rationed based

on the caste and of the village head Sarpanch (Mukhopadhyay et al., 2015). This discrepancy in

payment received by different social groups highlights corruption as an important factor in the

provision of NREGA employment. Existing literature has reported similar findings. For instance,

Adhikari and Bhatia (2010) report that corruption in the form of fudging of muster rolls, flawed

work measurement, non-payment of minimum wages and delays in wage payments is widespread

across the country.

We found no evidence of year-long agricultural labour contracts which would hinder worker's

ability to participate in NREGA. For over 81 percent of households engaged in self-farming or

wage employment, NREGA employment augmented their income time without causing any

significant substitution of private or self-employment by NREGA. This is contrary to Imbert and

Papp (2015) who find significant crowding-out of private wage employment post-NREGA. The

insufficient and unpredictable nature of NREGA provision does not allow farmers to change their

labour supply decisions in response to public employment. Further, since NREGA employment

occurs in the lean season of agriculture, labour demand in agricultural markets and in self-farming

is low.20 Further, most employers are flexible and adjust their own labour demand to allow workers

to participate in NREGA.21

Perceptions about NREGA provision

When we tried to ascertain people's perceptions about NREGA supply, an overwhelming majority

agreed that the provision of employment under NREGA is insufficient. However, there was little

awareness about its causes. Around 60 percent of the respondents claimed that the Pradhan “tries

his best” to create NREGA employment but has no budget to do so. Most people said that the

provision of NREGA has remained consistently low ever since its inception. Therefore, our

20 Most respondents claimed that they would prefer NREGA to remain operational throughout the year including the peak season of agriculture. This shows that labour demand in the rural economy (agricultural and non-agricultural) is insufficient to provide employment to workers at any point during the year. 21 In most cases, private employers (agricultural and non-agricultural) adjusted the timing of their labour demand by a few days to accommodate NREGA employment.

19

findings suggest that NREGA has not altered the social relations of production within the rural

economy. This is primarily because the actual provision of NREGA does not vary by demand but

is fixed exogenously by the Pradhan. The number of workdays created under NREGA is not

sufficient to meet the consumption requirements of poor households in the region. The average of

29 days of NREGA in the region in this study is lower than other regions including the worst

performing states. For instance, during the period between 2013 and 2016, at the national level,

NREGA generated 45 days of work in a year for each participating household in rural India.

4.2.2 Payment of Wages

Similar to the provision of NREGA employment, the nature of wage payment also diverged

considerably from the norm. Our study found that there is no set schedule for NREGA payment in

the survey villages. Officially, payment for NREGA works must be made weekly or fortnightly

(Dreze et al., 2006). The primary purpose of employment guarantee is to raise people's incomes

during the lean season of agriculture. Therefore, delays in payment effectively dilute the welfare

effects of NREGA (Basu and Sen, 2015). Around 84 percent of the respondents claimed that

NREGA payments were delayed by over two-weeks which is a direct violation of NREGA

provisions.22,23,24 Existing research identifies delays in payments as a major impediment to the

successful implementation of NREGA across the country. Problems of delayed wage payments

are effectively diluting the welfare effects of NREGA (Basu and Sen, 2015). Payment delays have

increased since 2008 with the movement from cash payments to payments through bank and post

office accounts and the complex procedures needed to approve payments for NREGA workers

(Ravallion et al., 2015).

Mode of payment

Over 92 percent of the respondents claimed to have bank or post-office accounts and produced

bank passbooks to show NREGA payments. In the remaining cases, the money was paid in cash

by the Pradhan. In some cases, respondents had given signed blank bank-withdrawal slips linked

22 The provision of NREGA remained low in Jharkhand even during acute agricultural crisis when it was most needed. 23 This is different from the experience in Jharkhand, Chhattisgarh, and Odisha where work is allocated to groups of workers and wages are paid to the group leader so individual workers receive less than their official wage (Banerjee and Saha, 2010). Further, several instances of collusion between local elected body and bank officials to reduce payments received by workers. 24 Studies from the neighbouring state of Bihar found even longer delays. For instance, in Bihar, 38 percent of payments are delayed by more than 60 days (Ravallion et al., 2015).

20

to their accounts to the Pradhan who would withdraw the money and pay cash to workers.25 In

around 39 percent of cases no wages were paid to workers even when they participated in NREGA.

Differences in wage payments by socio-economic status

Panel C of Table 4 shows that based on the number of days respondents claimed to have actually

worked, the average daily wage rate paid for NREGA employment was 65 INR (0.9 USD).26 The

actual wage rate differed considerably between social groups. For instance, on the one hand the

upper castes and Muslim households received an actual wage rate of 86 and 73 INR respectively.

On the other hand, the actual wage rate for SCs (including kols) and OBCs was only 63 and 69

INR respectively. The lowest wage rate was recorded for the STs who earned less than 60 INR a

day under NREGA. However, if we compare daily wage rates based on the number of days

officially reported on the NREGA website, we find that the average wage rate was 78 INR and

there was relatively little variation between wage rates between social groups.27

We were not able to discern any differences in wages paid to men and women workers. This is

particularly important since prior to NREGA, daily wages received by women were lower than the

legal minimum wage in most states in comparison to men (Basu, 2013) Using nationally

representative data (Zimmerman, 2012) has shown that female wages have risen considerably after

NREGA. Moreover Desai, Vashishtha, and Joshi (2015) finds that around 45 percent of women

working under NREGA during 20011 - 2012 were either not working earlier or were working

exclusively on family farms in 2004-2005. Therefore, NREGA gave several women their first

opportunity to earn a cash wage and consequently their material living, and household bargaining

position have significantly improved.

Perceptions about wage payments

Surprisingly, more than 88 percent of the households were aware that the minimum wage in the

district was around 100 INR per day but were not aware that the minimum wage laws applied to

NREGA employment. Further, most respondents felt they were paid a fair amount since their

neighbours and friends received similar wages. While most respondents remembered the dates and

25 In principle bank-withdrawal slips can be used only by the account holder to withdraw money but according to the respondents, the Pradhan can operate their bank accounts without them being present. 26 Using the 2017 exchange rate 1 USD = 69 INR. 27 Some respondents claimed that the Pradhan assured them that they will get another payment related to NREGA in the coming weeks. However, the CDO's office confirmed that all NREGA wages for the year were paid.

21

amounts of NREGA earnings, they could not calculate their wage rates and estimate whether their

earnings were commensurate with the number of days worked. Lack of awareness coupled with

lack of education may explain people's inability to determine whether they are paid fair wages. For

instance, the household head in 69 percent of the households was illiterate. This number was much

lower for upper castes (39 percent).

4.3 Supporting Facilities at Work Sites

According to Dreze et al., (2006), NREGA worksites are required to be located within 5 kilometres

of the village and should have provision for safe drinking water, shade for children and periods of

rest, first-aid box with adequate material for emergency treatment for minor injuries and other

health hazards connected with the work [Schedule II, Para 23]. All respondents agreed that

NREGA works were undertaken very close to the village (in most cases less than one kilometre).

However, most respondents agreed that apart from the provision of drinking water, no other facility

was provided at the worksite.

Panel D of Table 4 shows that most workers agreed that in their experience no health or childcare

facilities are provided at NREGA work sites. In some cases, women workers suggested that they

had to delegate child-care to other family members and would benefit if there was any form of

child-care support while they worked. However, they had never made a formal or informal request

for this as they did not think it was mandatory under the Act. Further, most women agreed that

their primary concern was lack of adequate work and timely payment under NREGA and

consequently, they would refrain from demanding work-site child-care facilities as that might

upset the Pradhan. This potentially creates impediments to women's participation in NREGA as

they disproportionately bear childcare responsibilities within the household.

4.4 Assets Created under NREGA

In eight out of twelve villages the respondents claimed to have worked under two NREGA works.

The construction of a water reservoir (talaab) and a mud (katchcha) road. Both existed and were

verified by our team. In the remaining four villages workers only worked on a water reservoir

which could not be completed as works had been halted owning to insufficient funds. Over 70

percent respondents claimed that the water reservoirs helped with agricultural production but

claimed that they have been working on the same reservoir for several seasons as it needs frequent

repairs. More than 80 percent of the respondents had no knowledge of any list of prospective works

22

maintained by the Gram Panchayat. Finally, most workers did not know that NREGA works were

meant to improve the productivity of their agriculture. It was believed that the government chose

which public assets were to be created under NREGA and local participants had no say in the

process.

While productive assets created under NREGA can create non-transfer welfare gains for the local

economy as they increase the productivity of agriculture (Abreu et al., 2014). However, the

experience of this region shows that this element of the program is not implemented seriously.

Creation of durable assets is also a significant source of corruption in NREGA. For instance, public

employment to create wells was undertaken in Jharkhand and corruption and bribery were rampant

during the construction process (Bhagat, 2012). Lack of accountability through social audits and

public disclosure of payment rolls hinders the ability of workers to examine fund utilization

certificates prepared by the officials (Ambasta et al., 2008). However, better implementation of

the program can help in minimizing corruption and increasing transparency in NREGA. For

instance, creating correct incentives for officials reduces theft by around 64 percent (Niehaus and

Sukhtankar, 2013). Better implementation of NREGA can increase private market wages by

around 6 percent and decrease days without work by 7 percent (Murlidharan et al., 2016).

4.5 Grievance Redressal

Over 90 percent of the respondents claimed that they had problems with the inadequate provision

of NREGA and delayed wage payments. However, in most cases they would only discuss this with

the Pradhan who would blame lack of budgetary allocation for the poor provision of NREGA.

None of the respondents claimed to have approached the BDO, NREGA PO, or any bureaucrat to

discuss problems related to NREGA implementation. This is consistent across social groups as

seen from Panel E of Table 4. In fact, nobody claimed raising this issue in the Gram Sabha or the

village assembly. This shows that people's perception of NREGA differs considerably from its

actual provisions. People have not realized that NREGA is a demand driven program and they are

entitled to 100 days of employment at the minimum wage. Most people claimed that they had no

knowledge about the provisions of NREGA and relied on the Pradhan's interpretation of the rules

and procedures to help them with their problems.

[INSERT TABLE 4 HERE]

23

5. NREGA’S IMPACT ON AGRICULTURE

It is important to investigate whether the creation of productivity enhancing assets under NREGA

has had an impact on agriculture in this region for three reasons. First, as mentioned above, this

region is traditionally characterized by the incidence of tied-labour and among the most backward

districts of the country.28 Correspondingly, it is important to study whether NREGA has been

successful in helping prevent indebtedness by raising the productivity and incomes in agriculture.29

Second, raising agricultural productivity through public works is an important non-transfer benefit

of NREGA which augments the direct income transfer under the program (Deininger and Liu,

2013). However, creation of productivity enhancing assets under NREGA requires a coordinated

push from the farmers, Gram Sabhas and the block level officials. As mentioned above, we found

no evidence of any planning or proposals for possible works under the program and there was no

mechanism for involving local farmers in deciding the nature of public assets created.

Finally, most NREGA beneficiaries in our sample were wage workers for most months in a year.

Existing research shows that the guarantee of alternative employment increases the bargaining

position of workers and exert an upward pressure on rural wages (Imbert and Papp, 2015; Basu et

al., 2009). Studies using national level data show that NREGA has allowed rural households to

increase consumption expenditure between 6.5 and 10 percent with around 12 percent increase for

marginalized caste groups (Bose, 2017).

5.1 Agricultural Profile of the Region

Table 5 provides an overview of the proportion of agricultural cultivators and wage workers by

social group. Around 74 percent of our respondents were engaged in some form of agricultural

production. Among these, 46 percent own the land they cultivate and the remaining 54 percent

work as sharecroppers on the land of large landlords. While we did not find any incidence of

28 The Backwardness Index comprises of agricultural productivity per worker, agricultural wages, and the proportion of SCs and STs in the population (Planning Commission, 2015). 29 Other studies have shown that NREGA employment enables peasants to withstand adverse weather shocks and the agricultural lean season when private labour demand is low (Bardhan, 1980). For instance, in 2008, around two-thirds of NREGA workers in North India avoided hunger and around 75 percent respondents credited NREGA for helping them sustain their livelihoods in the dry season of agriculture (Khera and Nayak, 2009). This, in turn may reduce their reliance on informal credit to meet their consumption or investment needs and reduces migration to urban areas. Studies have also shown that NREGA increased the consumption expenditure of the most vulnerable sections (Schedule Castes and Scheduled Tribes) during the lean season of agriculture (Klonner and Oldiges, 2014)

24

bonded labour in over 390 kol households that we surveyed, around 65 percent kol households

engaged in share-cropping (adhiya) where the landlord claimed about half the total produce. The

incidence of sharecropping among the kols was the highest among all social groups. As already

noted, sharecropping on land owned by the landlord (who also provides credit and inputs for

production) is an important component of tied-labour arrangements in this region. However, none

of our respondents reported that they were forced to work for their landlords exclusively.30

Most households cultivate small plots of land (less than 0.5 acre) and over 97 percent of the

respondents produced solely to meet their subsistence needs. They relied predominantly on

household labour and over 90 percent never hired any additional workers. The remaining 26

percent of the respondents work as landless labour in agriculture and non-agricultural wage

employment. Even among cultivators, household members engage in wage labour for six to nine

months in a year. The agricultural produce for these households lasts between three to six months

depending on the farm and family size. Members from most households that engage in self-farming

also work as agricultural wage workers as incomes from agriculture are not sufficient to meet their

subsistence needs. While 67 percent of all cultivators (and 60 percent of kol cultivators) reported

taking a loan from the landlords or local money lenders, none of them reported any work

conditionality attached to the loan repayment schedule. Interest rates charged were between 15 -

25 percent per month and none of the respondents had ever approached a bank or any formal

lending institution for credit. None of the respondents felt that banks would lend them any money

even when all of them had bank accounts and even ATM debit cards. Most loans were taken to

buy inputs for agriculture (67 percent), financing household consumption and medical expenses

came next (15 percent).

[INSERT TABLE 5 HERE]

5.2 Role of NREGA on Agricultural Productivity and Wages

Several studies have shown that NREGA positively impacts agricultural productivity (Berg et al.,

2012) and raises agricultural wages (Berg et al., 2018). However, results from our sample suggest

30 The landlord occasionally asks sharecroppers to work in his house during weddings and other ceremonies without any monetary payment. In the focus group discussions, we found that this practice was not practices across castes and was not confined to the kols. People in the region distinctly remember that kols were forced to work on the landlord's farms for 1kg rice and a bottle of local liquor but reported that this practice does not exist anymore. While we did not any incidence of debt-bondage in our sample, future research is needed to determine whether the practice is actually extinct from the region.

25

that NREGA had little impact on the intensity of inputs like fertilizer, machinery and labour

demand in this region. This is not surprising since we found little evidence of durable assets being

created under NREGA. Further, contrary to evidence from other states; none of the NREGA works

in this region were conducted in the fields belonging to marginalized communities. This is

particularly important as kol farmers were granted landownership of rocky and semi-barren land

on the outskirts of several villages under the Uttar Pradesh Land Ceiling Act of 1972.31 Under

Category II of the permissible works under NREGA, public employment can be used to undertake

individual works to improve the land belonging to scheduled castes, scheduled tribes, de-notified

tribes and other families below the poverty line (Dreze et al., 2006). In contrast, Rawaware et al.,

(2015) finds that in Maharashtra around 75 percent of NREGA works on private land belonged to

small (53 percent) and marginal farmers (22 percent) However, our study found that no such works

were ever undertaken in the rocky fields belonging to the kol farmers who could have benefited

immensely from such productivity enhancing works on their land.

We also investigate the impact of NREGA on agricultural wages. Our respondents claimed that

NREGA had no impact on their wage bargaining position vis-a-vis private agricultural employers.

In a few instances when workers had demanded higher wages, landlords simply refused and in the

absence of other alternative employment, workers had no choice but to accept the wages offered

by the landlords. This was also true during the lean season of the year when NREGA employment

was primarily undertaken. The ability of NREGA to increase wages depends on the increase in

wage bargaining power of workers that the guarantee of NREGA employment provides. In places

where this guarantee is diluted by the inadequate and erratic nature of NREGA provision, the

programme would not affect wages in the countryside (Misra, 2019). Further, owing to stagnant

agricultural productivity there was no increase in labour demand during the harvest season and

consequently there was no upward pressure on agricultural wages. In several instances, workers

reported having worked at wages below the legal minimum.

Therefore, contrary to the experience of better performing states like Andhra Pradesh, Rajasthan

and Tamil Nadu where NREGA has had a positive impact on rural wages and crowded-out private

employment (Dreze and Khera, 2009; Imbert and Papp, 2015), in the most backward regions of

31 Under the Land Ceiling Act of 1972, the maximum land size for agricultural holding was fixed at 12.5 acres. Any landholding above this size was confiscated by the state and redistributed among the landless workers, primarily belonging to the marginalized social groups. However, there has been limited real redistribution under the scheme and most land transferred is barren or non-agricultural land. See Singh and Mehrotra (2014) for a full discussion on land reforms in UP.

26

the country, the full potential of NREGA has not been realized. In fact, its implementation does

not allow cultivators to increase the productivity of their agriculture or workers to improve their

wage bargaining potential. It simply serves as an erratic and unpredictable source of income for a

few days in the year. Almost all respondents claimed that NREGA earnings were spent in

household consumption and was not enough to increase their savings or provide for agricultural

investment. Next, we discuss how lack of transparency and citizen's participation in the provision

of NREGA is leading to elite capture and corruption in its implementation.

6. LACK OF AWARENESS AND THE LOCAL POLITICAL ECONOMY

6.1 Role of the Pradhan

The Pradhan plays a pivotal role in NREGA provision, wage payment and record collection in

every gram panchayat. In most cases, people approach the Pradhan with most of their NREGA

related queries. However, when we questioned people on whether the Pradhan’s discharge their

duties as mandated by the NREGA Act, we found that the Pradhan did not keep any records of

existing works, number of days of employment created and wages paid in a transparent manner.

Further, NREGA job-cards were never updated with particulars of the number of days worked and

wages paid. In several cases the Pradhan kept the job cards, so people had no idea of the wages

they were actually paid and the number of days of work that got registered in the official records.

This increased the opaqueness in the functioning of NREGA.

Paradoxically, as outlined in Section 4 above, almost all respondents had a positive view of the

role played by the Pradhan in helping them with NREGA related difficulties. Table 6 shows that

most respondents thought that inadequate provision of NREGA and delays in wage payments were

minimized because of the efforts of the Pradhan. It was believed that the Pradhan even pays the

panchayat mitra an additional monthly payment of 5000 INR for maintaining NREGA records for

the entire village.32 In addition, our respondents never met or interacted with any of the government

functionaries like the Program Officer or saw the BDO inspect any work site. Even in Halia village

which is located within a few kilometres from the Block headquarters, 80 percent of the

32 Panchayat mitras are local officials who assist with the day to day functioning of the Gram Panchayat.

27

respondents agreed that they had never heard of the Program Officer and less than 6 percent of the

respondents said they ever spoke to any one from the BDO's office.

This central position of the Pradhan is primarily because of a total lack of awareness of the

provisions of NREGA among the beneficiaries. In the absence of any transparency measures like

social audits, this concentration of political and social power with the Pradhan has led to client-

patron exchanges and corruption in the functioning of NREGA. Table 6 shows that around 90

percent or more respondents of all social groups believed that the provision of NREGA depends

solely on the Pradhan who has consolidated his position considerably in the local economy.

Respondents explained that if they have to approach the Pradhan with their NREGA related

complaints, they could not afford to antagonize him in any way. We find that in this region, the

village Pradhan not just controls all facets linked to NREGA implementation in his Gram

Panchayat but has also emerged as the link between citizens and government officials. A

respondent in Maheshpur village summed up the role of the Pradhan as follows.

“Pradhanji is surely on our side, he runs around for our work and does not ask us for anything. If

the government doesn’t release funds, how can we blame him? He even withdraws our money and

delivers it it us from the bank”

Experiences from Jharkhand where local body elections have not been held since 1978 also show

that local institutions like the Gram Sabha lacks the administrative capacity to implement NREGA

(Bhatia and Dreze, 2006). The absence of village assemblies seriously dilutes the legal entitlement

of NREGA as these assemblies are pivotal in ensuring that NREGA is implemented when people

demand employment from the state. In most cases, this lack of administrative capacity is also

reflected in the delay in appointment of officials at the village and block level.33 In fact, these

deficiencies in public personnel and institutional capacity allows public officials to restrict the

number of job cards and regulate the supply of NREGA workdays.

[INSERT TABLE 6 HERE]

33 Officials at the local level include panchayat sevaks or panchayat mitras and gram rozgar sevaks and block level officials include supervisors, engineers etc.

28

6.2 Patron-Client Exchanges NREGA Implementation

According to Scott (1972) patron-client relationships consist of exchanges between an individual

of higher socio-economic status (patron) who uses his own influence and resources to provide

protection or benefits, or both, for a person of lower status (client) who, for his part, reciprocates

by offering general support and assistance, including personal services, to the patron. Such

repeated exchanges between an identifiable agent within a community is a form of rent seeking in

developing countries. The patron spends a part of the rents created in one period to provide

protection and access to scarce resources to clients in their networks to maintain their influence

and authority which allows further rounds of rent-seeking (Khan and Jomo, 2000). The pivotal

role played by the Pradhan in the functioning of NREGA in his Gram Panchayat establishes him

as the principle patron in the repeated provision of NREGA which creates rents for the local elite.

One of the respondents in Fuliayi summed up the Pradhan’s role in the implementation of NREGA

as follows.

“If he [Pradhan] would not benefit, then why will he work so hard for our welfare”

Dutta et al., (2012) attribute the low demand and participation rates in NREGA in Bihar, Jharkhand

and Odisha to low information and awareness. As workers are unaware of their rights under

NREGA, they rely on the Pradhan for the provision of NREGA. The Pradhan in turn, benefits

from lack of transparency in the functioning of NREGA to control its supply to suit the interests

of local landholding elite and appropriate NREGA funds. At the same time, the Pradhan spends

some resources to ensure that workers continue to trust and rely on him to address their concerns

and grievances related to the functioning of NREGA. By excluding the role of community

participation and decision-making through the Gram Sabhas, Pradhans not only dilute the demand

driven provisions of NREGA, but also create opaqueness in the implementation of NREGA. This

arrangement suits government functionaries as workers do not approach the PO or BDO with

requests for NREGA and the official records can show that there is no unfulfilled demand for

NREGA in their regions. Such complicity between lower-level government officials and local elite

has been studied extensively in the Indian context. For instance, Bardhan (1998) argues that

professionals, large landlords and capitalist form dominant coalitions in India which exclude the

poor from political participation and economic prosperity. Existing research also finds that the

impact of NREGA on agricultural labour markets is muted in regions where high levels of land

29

inequality have persisted historically (Misra, 2019). In these districts, the class interest of large

landlords is adversely affected by an upward pressure on agricultural wages exerted by the

guarantee of NREGA employment. Consequently, the elite like the Pradhan control the provision

of NREGA to ensure that it does not emerge as a credible alternative to private agricultural

employment.

6.3 Corruption in NREGA Implementation

If NREGA employment is provided for 100 days in a year and wages are paid on time, the wage

bill of large landlords would rise. In most cases the Pradhan or his extended family members are

major employers of agricultural labour. Therefore, it is in their interest to curtail the supply of

NREGA. Further, ignorance of official procedures creates avenues for corruption and fund

embezzlement. Our surveys revealed that the number of days worked by individuals recorded on

the NREGA website differed significantly from the number of days workers claimed to have

worked. As we were conducting our study shortly after NREGA works ended for the year and

since most workers worked on similar projects, it was easy to calculate the number of days that

each member of the household worked under NREGA. On average, around 42 percent of our

respondents reported working more days under NREGA than what was officially recorded, and

the remaining workers had worked fewer number of days. This discrepancy also existed in their

wages paid, as payments are released based on the official number of days worked by people.

Therefore, workers whose workdays were underreported in the official statistics, were paid less

and others were paid more for the same number of days worked.

As outlined previously, the Pradhan maintained control of payment schedules and in some cases,

he was also in possession of bank account details and withdrawal slips linked to workers accounts.

Individual NREGA beneficiaries had no idea how much money was deposited in the account by

the state, but only knew the cash payment received by the Pradhan. This discrepancy in NREGA

records and opaqueness in wage payment is maintained by the Pradhan as he controls data entry

for NREGA works at the village level. Further, several respondents believed that the Pradhan

submits several requests to the BDO to ensure the release of NREGA funds. This is important to

ensure that corruption rent-seeking continue through the patron-client engagements devised by the

Pradhan.

30

7. POLICY IMPLICATIONS

By documenting the functioning of NREGA in one of the poorest regions of UP, this paper aims

to explain why NREGA may not be performing well in eastern Uttar Pradesh. Using semi-

structured interviews and household surveys with government functionaries and NREGA

beneficiaries we find that three main factors contribute to the poor and opaque implementation of

NREGA in this region. These include: (1) lack of awareness of workers' entitlements, (2) poor

administrative capacity, and (3) corruption and collusion between the bureaucracy and local level

elected officials.

This paper contributes to the existing literature by arguing that lack of awareness about the

provisions of NREGA not only limits participation in public works but also serves as a basis for

patron-client relationships to emerge between the local elites, primarily the Pradhans and NREGA

beneficiaries. By centralizing all decision-making and NREGA record keeping practices, the

Pradhans can engage in rent seeking through corruption and protect their class interests by keeping

rural wages depressed. This arrangement also suits local administrators as it insulates them from

day to day monitoring and implementation of NREGA. However, this collusion between the local

elite and government officials effectively dilutes the demand driven nature of NREGA. Periodic

social audits and people's participation in its implementation act as checks and balances on elected

representatives and government officials at the local level. Our findings suggest that grassroots

organisations like the Mazdoor Kisan Shakti Sansthan in Rajasthan are indispensable to ensure

citizens’ participation in the functioning of NREGA. In the absence of such organizations, the

provision of NREGA may be controlled by the local elite who may benefit from controlling the

supply of public employment. However, our study shows that these measures have not been

introduced in eastern UP. Similarly, no durable assets have been created to augment agricultural

productivity in the region. As consequence the spill over benefits of NREGA have not been

realized and there is no change in agricultural productivity or labour demand.

There are three important implications of this study. First, there is an urgent need to increase

awareness and administrative capacity at the state and district level. These offices were severely

understaffed and ill-equipped to handle the administrative workload of NREGA. This under-

staffing leads to sub-contracting of important data entry and verification work to part-time

31

employees at the state level and to people affiliated to the Pradhan’s at the village level. Not only

does this dilute the transparency provisions of the Act, but it also creates avenues for corruption.

Second, information about the provisions of NREGA is shockingly absent even after 10 years of

its existence. There is an urgent need to fill this lacuna. In the absence of awareness of entitlements,

the demand driven nature of the program is diluted. Therefore, public information campaigns and

local self-help groups must be strengthened to ensure that the guarantee of public employment is

maintained and NREGA emerges as a credible alternative to low wage and seasonal agricultural

employment.

Finally, there is a growing gap between the performance and impact of NREGA between states

and regions. Therefore, there is a need to understand the role of local political economy factors

that condition and complicate the functioning of NREGA. The role of local elite and their collusion

with government officials effectively exclude NREGA beneficiaries from participating in the

planning process and maintaining an oversight of funds transfer, works completed and

employment generated. Further research is needed to identify the impediments faced by citizens

in organizing and participating village level discussions on various aspects of NREGA which can

create accountability in its provision.

32

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Figure 1: Mirzpur, Uttar Pradesh

(a) Uttar Pradesh(b) Mirzapur

Table 1: Socio-Economic Characteristics of the Sample

Variable Sample Mirzapur Uttar Pradesh(1) (2) (3)

Percent Scheduled Castes 38 28 23Percent Scheduled Tribes 5 0.9 0.7Rural Literacy Rates 32 67 65Scheduled Castes Literacy Rate 35 56 60Scheduled Tribes Literacy Rate 39 57 54Percent Cultivators 31 23 36Percent Agricultural Labour 46 42 36

Population 973 2 million 155 million

Note: This table shows population percentages of socio-economic indicators of our sample, the district of Mirzapur

and the state of Uttar Pradesh in columns (1), (2) and (3) respectively. The values for the sample characteristics

are calculated using survey data which comprises of a random sample of NREGA workers in 2016. The district and

state-level measures are taken from the Census of India, 2011. All state and district level statistics are reported for

rural sectors of the economy including the total population estimates.

Table 2: Distribution of social groups by Gram Panchayats in the sample

Name of the Village Scheduled Castes Scheduled Tribes Other Backward Tribes Muslims Kols Upper Caste Hindus Total(1) (2) (3) (4) (5) (6) (7)

Babura Bhairodayal 21 0 5 0 14 0 40Babura Kala 5 2 10 0 11 0 28Babura Raghunath 13 0 0 6 11 0 30Badauha 4 3 0 0 24 0 31Banawa 81 0 17 1 0 2 101Deohut 13 6 0 2 40 0 61Fuliyari 60 20 38 0 126 13 257Gaurva 8 2 5 2 105 2 124Halia 45 4 0 4 25 0 78Khutha 48 9 0 0 5 0 62Maheshpur 63 3 25 16 0 1 108Parshiyakala 10 0 8 3 32 0 53

Total 371 49 108 34 393 18 973

Note: This table shows the distribution of our sample across the twelveGram Panchayats of Halia block of Mirzapur.

Table 3: Descriptive Statistics: Household Characteristics

Variable Scheduled Castes Scheduled Tribes Other Backward Tribes Muslims Kols Upper Caste Hindus(1) (2) (3) (4) (5) (6)

Average HouseholdSize

5.40 6.04 5.62 5.94 5.65 5.67

Average Age 44.75 44.94 44.45 45.06 44.61 40.05Women-headed House-holds

0.33 0.26 0.35 0.18 0.41 0.44

Illiterate 0.65 0.62 0.73 0.74 0.73 0.39Below Poverty Line 0.64 0.59 0.66 0.50 0.57 0.78Ration Card 0.94 0.92 0.85 0.94 0.90 0.94Katcha Floor 0.98 0.99 0.98 1.00 0.99 1.00Solar Energy 0.80 0.86 0.81 0.91 0.88 0.94Water from open wells 0.89 0.93 0.93 0.97 0.92 1.00Toilet 0.15 0.06 0.07 0.18 0.07 0.17Bicycles 0.82 0.69 0.81 0.88 0.77 1.00Mobile Phone 0.47 0.39 0.41 0.35 0.48 0.56Farm animals (mostlygoats)

2.05 2.00 2.16 2.38 2.00 2.44

Migration 0.33 0.45 0.50 0.62 0.31 0.55

Number of House-

holds

371 49 108 34 393 18

Note: This table presents socio-economic characteristics of surveyed households by social group. Av-erage household size refers to the number of individuals living in a separate dwelling and averageage refers to the age of the household head. Literacy status is reported for the head of the house-hold. For all other indicators, the table reports the proportion of households headed by womenor own a certain asset like bicycle or mobile phone. Farm animals reports the average num-ber of animals owned by the household and migration refers to the proportion of households fromwhich at least one member lives and works outside the village for more than six months in a year.

Table 4: NREGA Participation by our Respondents

Variable Scheduled Castes Scheduled Tribes Other Backward Tribes Muslims kols Upper Caste Hindus(1) (2) (3) (4) (5) (6)

Panel A. Applying forNREGA works

NREGA Job-Cards present 0.91 0.92 0.94 0.76 0.90 0.94Households never requestedNREGA employment

0.80 0.88 0.79 0.56 0.83 0.94

Households involved inNREGA planning

0.22 0.12 0.23 0.29 0.24 0.22

Panel B. Provision ofNREGA employment

Participation by Women 0.12 0.16 0.15 0.15 0.12 0.06No of NREGA workdays (Re-spondents)

27.81 31.00 31.81 25.18 30.66 25.00

No of NREGA workdays (Of-ficial)

20.62 20.67 24.18 18.35 29.65 36.39

— Provision of 100 days ofNREGA

0.07 0.10 0.10 0.06 0.10 0.17

Payment without Work 0.03 0.10 0.02 0.00 0.06 0.06

Panel C. Payment of Wages

Bank or Post O�ce Account 0.92 0.92 0.94 0.91 0.92 0.89Reported Legal MinimumWage

97.22 99.86 104.08 110.62 95.26 102.33

Average daily wage receivedunder NREGA

63.06 59.37 68.93 63.45 70.89 86.08

Delay of two weeks or more 0.72 0.80 0.63 0.50 0.72 0.89

Panel D. Supporting Facili-ties at work site

Absence of Health-care facil-ities

0.97 1.00 0.99 1.00 0.98 1.00

Absence of Childcare Facili-ties

0.93 0.98 0.96 0.97 0.94 1.00

Panel E. Grievance Redressaland Impact of NREGAApproached solely Pradhanwith problems

0.93 1.00 0.95 0.88 0.94 0.89

No impact of NREGA onoverall welfare

0.95 0.96 0.95 1.00 0.95 0.94

No impact of NREGA onsavings

0.10 0.18 0.07 0.06 0.15 0.17

Should NREGA continue 0.99 1.00 1.00 1.00 0.99 1

Number of Households 371 49 108 34 393 18

Note: This table summarizes the di↵erent aspects of NREGA participation by the respondents. The

responses are based on participant’s awareness, perceptions and experience in working with NREGA.

Average number of work days and average daily wages (in nominal terms) are based on actual

work done and payments received by our respondents. All other variables are proportions of house-

holds who report not having applied for NREGA employment or receiving payment without work

etc. These replies are based on workers’ past experiences with NREGA planning and implementation.

Table 5: Agricultural Profile of Survey Respondents

Variable Scheduled Castes Scheduled Tribes Other Backward Tribes Muslims Kols Upper Caste Hindus(1) (2) (3) (4) (5) (6)

Self-Farming 0.71 0.65 0.83 0.56 0.76 0.83Share-cropping 0.33 0.37 0.40 0.15 0.65 0.10Agricultural Labour 0.46 0.53 0.56 0.53 0.43 0.39Non Agricultural Labour 0.09 0.04 0.07 0.15 0.07 0.17Small landholding size 0.61 0.55 0.67 0.94 0.47 0.33Medium landholding size 0.34 0.33 0.27 0.06 0.48 0.61Large landholding size 0.05 0.12 0.06 0.00 0.05 0.06Farming for sale 0.03 0.02 0.06 0.00 0.015 0.11

Number of Households 371 49 108 34 393 18

Note: This table shows the agricultural profile of the surveyed households by social group.Self-farming, share-cropping, agricultural and non-agricultural labour are measured as proportionsof survey respondents with household members engaging in these occupations. Small landhold-ing refers to a farm-size of less than one acre, medium land holding size is greater than oneacre but less than four acres and a land holding is characterized as large if it is greater thanfour acres. The values in the table report the proportion of households owing small, mediumor large landholding by social category and whether they produce for the sale in markets.

Table 6: Role of the Pradhan in NREGA Implementation

Variable Scheduled Castes Scheduled Tribes Other Backward Tribes Muslims Kols Upper Caste Hindus(1) (2) (3) (4) (5) (6)

NREGA ever discussed inGram Panchayat

0.11 0.22 0.02 0.00 0.15 0.11

Ever Approached BDO 0.22 0.35 0.13 0.09 0.24 0.39Ever Approached PO 0.11 0.22 0.02 0.00 0.13 0.11Pradhan solves NREGAissues

0.93 1.00 0.95 0.88 0.94 0.89

Pradhan solely responsiblefor NREGA

0.89 0.96 0.89 0.79 0.92 0.94

NREGA has consolidatedthe position of Pradhan

0.92 0.88 0.94 0.97 0.89 0.83

Number of Households 371 49 108 34 393 18

Note: This table shows the experience of NREGA beneficiaries in our survey and presents theirperceptions about the role of the Pradhan in the functioning of NREGA. The values in the ta-ble are the proportions of households who have approached the village assembly (Gram Sabha),Block Development O�cer or Programme O�cer with any NREGA related issue. The lasttwo rows of the table report the proportion of our respondents who agree with the claim thatthe Pradhan is solely responsible for implementing NREGA and that the socio-economic posi-tion of the Pradhan has improved because of the central role played by them in its provision.